I am so deadly serious - do not continue working if your invoices are late.
You don't have to be a jerk about it, just explain to your primary contact that you need to be paid and you pick up tools again when the money has arrived.
BUT it is on YOU to properly negotiate reasonable payment terms. And if you don;t know or don't trust the client then require payment in advance until a stronger commercial relationship can be settled in. Do not be a baby - go research business contracts and payment terms.
Do not be afraid to lose business from companies that are squeamish about paying you - in fact actively avoid such companies.
I feel like it's easy in hindsight to say some tough sounding advice in the form of "be a hard-ass", but idk, I feel like there are plenty of real life cases that contradict this advice- taking a chance on a referral to work on something you find interesting. Of course the big-money clients will be fine with a hard-line stance and they have money to pay at the end, but that work tends to be less interesting.
OTOH, one other clear subtext of the story is the "savior" attitude of a lot of tech people, who think that, if they weren't using version control before, think, "oh, I'll just tell them about this great thing, and because it's much better they will definitely listen to me and implement it - it's only logical". But the harsh reality is that "better" things won't affect an org that went along that far and dug themselves that deep.
Never underestimate an org's ability to shoot itself in the foot, even if you think you know better. That includes getting your money from them.
Sadly this is true and lesson anyone who has worked freelance has probably learned - either that or I'd wager they no longer do freelance.
Its easy to say don't be afraid to lose business, but when you're starting out, the economy is rough or all you have are the one or two clients, that's a different matter entirely.
One thing I've learned is that you always have to do the leg work, you can't assume someone will do the right thing or keep their word.
Develop a system where even bad clients, can't do too much damage i.e. upfront deposits, milestone-based payments. You have to control cash flow risks, if you are gonna take risks know what risks you're taking and when to get out.
> Sadly this is true and lesson anyone who has worked freelance has probably learned - either that or I'd wager they no longer do freelance.
Sadly, while this is true, there are plenty of folks still doing freelance who have not learned this, and there always will be. It's just one of those lessons that quite a lot of people have to learn from experience, even after reading posts like this. The exact same reason why companies will continue to get away with taking advantage of freelance work.
> Do not be afraid to lose business from companies that are squeamish about paying you - in fact actively avoid such companies.
My boss said that the ones who have negotiated the best deals are the ones that are late paying, complain about just about every bill and will write angry letters when my boss index adjust pricing.
He said it taught him to never offer a really good deal for a regular customer (ie where the upside isn't very obvious).
I'm not sure that's the best takeaway here, in that it gets the causation wrong. It's not the deal that made the customer bad, it's that the bad customer insisted on getting a deal, whereas a good customer usually knows what quality costs and is prepared to pay.
The takeaway here is probably that the fix isn't just "never discount", but it's to screen for the kind of customer who treats a good deal as an invitation to strengthen the relationship.
This is really the key. The "deal" has to have something for both parties. The vendor gets some kind of lock-in, prepayment, guarantee of future business, whatever it is, and in exchange the purchaser gets a discount.
A professional knows what they're worth and what they need to deliver. On-time payment according on an agreed-upon schedule is table stakes. That's the most fundamental requirement. Nothing happens without that.
100% agree, and to add it can be tough sometimes to walk away from a cool project. I had worked on a project building scientific trial software, an app to review 3D lung scans, and an ML model to detect lesions in lung scans. It was really empowering, but after the first scientific trial the customer stopped paying their bills and ended up in back payment of $1M. My boss closed the project which sucked but it ultimately cost the company and people’s jobs. Just not worth interacting with bad people if they stop the agreement. There is most likely more money later but there is also money that is on time with other customers.
We’ve also learned this lesson the hard way. These are now the clauses we require in every project we do:
- Payment is due X days after receipt of invoice, or immediately after the consultant has addressed any quality issues, whichever is sooner
- Late payment shall incur interest at 8% above the BoE base rate and a late fee of 100 GBP as per the UK Late Payment Legislation. Partial payments on invoices shall apply to late fees, interest, and then principal, in that order.
- In the event of a late payment the invoice for the next deliverable shall immediately fall due.
- The consultant shall be entitled to shift deadlines on deliverables in the event of a late payment as a result of any work disruption, without incurring any liability.
- Payment shall be made in X currency, or an exchange rate at X date on Oanda.com shall apply.
- The client is responsible for any bank fees incurred by their, or any intermediary bank. In the event of a SWIFT transaction it shall be made with the OUR payment code.
- The jurisdiction in the event of a conflict shall be England and Wales. Neither party shall be bound by arbitration.
- The client and consultant shall both indemnify the other up to the total value of the contract and shall not under any circumstance be liable beyond X GBP.
We also no longer share downloadable links of our deliverables until they are paid up. They get a view/comment only link for reports/data etc.
We’ve found that clients that aren’t willing to accept these terms won’t pay you either way.
We determine the net days on the invoice based on the credit rating of the client. Ironically, the good clients pay within 2-3 days normally, and the difficult ones are very “long tail”. About 1% of contracts tend to fully or partially default on their payments.
We’re in a particularly credit poor industry but our average delay due to late payment is 23 days. Those clients where we stop delivery pay on average 11 days sooner than those contracts where we don’t stop delivery.
This is based on around 2,000 invoices sent over the last 5 years.
Oh and another lesson! Ensuring that each deliverable invoice is small enough that it falls under the simplified claims procedure (in the UK it’s 10,000 pounds) greatly simplifies collection.
It costs something like 80 quid to file for recovery in court and in our experience invoices are immediately paid up when a “Letter before action” is sent.
You burn the relationship, but arguably you probably don’t want it anyway.
I think OP needed "emergency service is cash up front".
In a different domain, this is the painful lesson of almost anyone who tries to help people in a bind -- you can try to help, but yours is unlikely to be the advice that sets them straight, so you shouldn't get too invested with unproven or, especially, proven unreliable actors.
One thing I learned from consulting is if you position yourself as the "fix your mess" guy you have to be very defensive. Ask for more up-front, and bail at the first sign of underpayment.
Be pleasantly surprised when a poorly run project is being run by nice, honest people. Prep for the opposite.
Actually sort of darkly clever– they turned OP into an unwitting investor.
Project goes well, he gets paid and they're best buds, and he doesn't even realize he was scammed (by intent). If not, well there's no point suing a failed company.
When you walk into a shitshow like this, the first thing you do is secure your payments. Anyone who is in such bad shape like how OP described it means that they are desperate, and desperate people will do and say anything to get help.
It is most likely going to not pay anyone so you need to make sure you're paid above and beyond anything else otherwise walk.
Reads to me like the author is trying to elicit some empathy. It just sounds like he was just fine leaving his family for a job. Not getting paid couldn’t have factored into that decision.
He doesnt provide any context for that if so and if you look around the site, doesn't seem like the case at all. More like he just decided on the phone something interested him enough to bounce indefinitely.
I have a friend who retired but still does some contract work. They were on salary their whole career and are not used to sending invoices and tracking down payments. One of their clients was late paying and my friend wasn't concerned, but I encouraged them to be diligent about insisting on being paid on time. I have been a freelancer for over a decade and in my experience, the further away you get from a bill, the less real it becomes to the person who owes it. They start forgetting what the project was, or worse, start questioning why they even have to pay for it. You have to stay on top of these things or they can spiral out of control.
Worked in the SF tech scene since 2010, and so many founders who I found through YC/HN and AngelList failed to pay me over the years.
Often paid late, but FIVE times, I never got paid at all, one time it was several thousands over the course of months and I almost pursued it in court, but in the end I took the L.
It's always these incubator types, they're the absolute worst clients. They have the cash in the bank too, they often just forget or feel entitled and don't want to back down.
It isn't, but you can't get blood from a stone and squeezing costs money.
It sounds like the entity that the contract is with has no real assets and/or is based in a jurisdiction which is hard to enforce judgements in. That's a case where you need to get paid up-front, which is the real lesson in this article.
Never do anything on faith or as a handshake deal. Always ensure you get paid (hint: escrow is kryptonite for weasels). Trust everyone, just not the devil inside them.
Have a contract that encodes "fuck you, pay me" into the terms. Ideally, have an actual lawyer take care of the contract and the enforcement. There's a lot of law-y stuff out there that won't hold up in reality. Mortgage companies don't take payment in excuses from your clients, so neither should you.
What's an "AR bus"? How can augmented reality windows work on a bus unless you are (a) tracking the passenger's head and (b) there's only one passenger?
Screens outside the windows (not on the windows) can provide parallax, no need to track heads. However, in this case:
> They were attempting to pull off AR effects on the transparent OLED windows of the bus without accounting for lens distortion, field of view, parallax, occlusion, etc., and were frustrated and mystified when things didn’t appear to line up. They were completely naive to what depth and scale cues are and how to deploy them.
I've started operating in really granular units of work. Like less than $1000 per. Cash on delivery. This won't work with all clients and all jobs, but there are places where it does work very well. Advantages include being able to avoid paper contracts altogether. Verbal agreements and a 4 column xlsx that is reviewed monthly are all that seem to be required with some of my clients.
If I don't get paid for one day of work, I will probably get over it in a few hours. If I don't get paid for six months of work, we will have a serious problem. The tighter and more incremental we can make the delivery process, the less likely anyone gets screwed.
If a party is pushing hard for long-term contracts or large up-front sums of payment, I would walk away from that transaction unless there was a literal golden goose sitting in their lap.
I am also trying to set granular milestones and get paid every 1000€. Not provide 20000€ work and then start looking for my money. I can live with a loss of 1000€, but missing 20000€ will impact negatively my mortgage and investment plan.
> End clients can’t tell the difference between these bozos and me. I don’t know what to do with that information but it feels bad.
This is unfortunately all too common. It's hard for someone who isn't an expert in the specific field to separate a smooth grifter from a more typical sales pitch
That doesn’t really sound like “being ripped off,” as opposed to “betting on a lame horse.”
The people behind this were irresponsible, childish, and exemplars of the Dunning-Kruger effect. They weren’t really hardline crooks. Crooks are probably a lot more organized.
I have gotten myself invested with similar crowds. There’s usually a charismatic spokesperson, leading the chaos.
They likely didn’t plan to rip him off, but paying him wasn’t really something they thought about. Real crooks put lots of planning into taking money.
> Multiple very junior developers were touching (binary, TouchDesigner) code and deploying straight to production via thumb drive, with zero version control. In fact, they didn’t know what version control was.
I suspect many startups fit that description. If they survive, then they usually pull themselves up by the bootstraps, eventually. Many of them collapse, taking everything with them.
The fact that this is so many words makes me worry the author underappreciated the main lesson: risk exposure.
When you go out of pocket - you are out of pocket and the risk is all yours. If that one thing was different then all the remaining risk is on the client - they don't want to do version contr - ok cool you still get paid.
Usually when you have to pay in to get paid out (outside of a direct investment scenario) it's a scam. The people who fall for the Nigeria Prince thing are operating the same way.
Contract terms can vary greatly depending on the situation and the company you’re working with.
Early/frequent payment terms are always good to have but you may not always have the leverage for it depending on where you’re at as a contractor.
Takes getting ripped off a times before insisting on better terms I guess. It’s like bombing your first job interview… you can prepare but it just needs to happen.
No longer a contractor but I used to offer a 10-15% discount for paying upfront. Almost every client took this deal. Earned a little less but never lost sleep over payments.
He says "trust your gut" about 12 times, but the whole lead up has 0 mention that he was worried he would not get paid. His only gut feelings seemed to be around tech issues.
> They were carpetbaggers and dilettantes convinced by their own inexperience and the advice of a onetime VJ that they could pull off something I’d twice helped quote to be brought home by a cadre of hardened killers with shitloads of math and know-how at eye-watering prices. They were way way way over their heads and were in no way interested in updating their priors in light of the shit they were swimming in.
And yet, somehow, you gave them the most important time you had for their promises.
no it isn't. why you did not sue them? success rate of international arbitrage (New York Convention) proces into China is 90% success rate. USA/EU companies who sue Chineses companies in China for breach of contract seem to be winning rates. Enforcement of USA curt orders do not need to go thorugh Chinese courts again, and are enforced by local authorities (local sharks) with success rate of 80% for foreign firms suing chinese firms. fees are also fairly low. case is straightfoward.
if author went and sue, likely he would get his money back.
In a fight between a piece of toilet paper backed by millions in legal spending vs a rock solid contract backed by nothing the toilet paper (even if it is used toilet paper) will win every single time.
There's no such thing as a company temporarily being in dire straits. These kind of companies are always in dire straits and crisis - it's a business tactic to not deliver and not pay. Just stay away, whether you're a customer, a contractor, an employee or if they want to be your customer.
I was owed billable hours from Stanford University but refused to do any further work until the outstanding invoice was paid. Their accounts payable department didn't want to, so I had to tell the client "sorry" and walked away. It's really weird because I didn't have a problem in the near past then and was even an FTE at one point. I'm unwilling to work for free or for imaginary, low liquidation preference equity of a worthless startup.
Ordinarily, I would sign master agreements and set PO terms up-front. Typically, the better customers would agree to very strict requirements / objectives for a particular time period for a specific price. Any deviations would require negotiation. Hourly is fine too but there must be regular milestone deliveries so that there's demonstrable value for money being conveyed rather than an appearance of a milking-oriented consultant. Expectations must always be managed.
I don't want to name what my quick Google search revealed, but if you search for augmented reality bus Beijing there aren't many options and it fits the authors characterization of their fleet consisting of ~20 buses.
I am so deadly serious - do not continue working if your invoices are late.
You don't have to be a jerk about it, just explain to your primary contact that you need to be paid and you pick up tools again when the money has arrived.
BUT it is on YOU to properly negotiate reasonable payment terms. And if you don;t know or don't trust the client then require payment in advance until a stronger commercial relationship can be settled in. Do not be a baby - go research business contracts and payment terms.
Do not be afraid to lose business from companies that are squeamish about paying you - in fact actively avoid such companies.
OTOH, one other clear subtext of the story is the "savior" attitude of a lot of tech people, who think that, if they weren't using version control before, think, "oh, I'll just tell them about this great thing, and because it's much better they will definitely listen to me and implement it - it's only logical". But the harsh reality is that "better" things won't affect an org that went along that far and dug themselves that deep.
Never underestimate an org's ability to shoot itself in the foot, even if you think you know better. That includes getting your money from them.
Its easy to say don't be afraid to lose business, but when you're starting out, the economy is rough or all you have are the one or two clients, that's a different matter entirely.
One thing I've learned is that you always have to do the leg work, you can't assume someone will do the right thing or keep their word.
Develop a system where even bad clients, can't do too much damage i.e. upfront deposits, milestone-based payments. You have to control cash flow risks, if you are gonna take risks know what risks you're taking and when to get out.
Sadly, while this is true, there are plenty of folks still doing freelance who have not learned this, and there always will be. It's just one of those lessons that quite a lot of people have to learn from experience, even after reading posts like this. The exact same reason why companies will continue to get away with taking advantage of freelance work.
My boss said that the ones who have negotiated the best deals are the ones that are late paying, complain about just about every bill and will write angry letters when my boss index adjust pricing.
He said it taught him to never offer a really good deal for a regular customer (ie where the upside isn't very obvious).
The takeaway here is probably that the fix isn't just "never discount", but it's to screen for the kind of customer who treats a good deal as an invitation to strengthen the relationship.
This is really the key. The "deal" has to have something for both parties. The vendor gets some kind of lock-in, prepayment, guarantee of future business, whatever it is, and in exchange the purchaser gets a discount.
The discount doesn't just come out of nowhere.
That was indeed the point, guess I conveyed it in a poor way.
- Payment is due X days after receipt of invoice, or immediately after the consultant has addressed any quality issues, whichever is sooner
- Late payment shall incur interest at 8% above the BoE base rate and a late fee of 100 GBP as per the UK Late Payment Legislation. Partial payments on invoices shall apply to late fees, interest, and then principal, in that order.
- In the event of a late payment the invoice for the next deliverable shall immediately fall due.
- The consultant shall be entitled to shift deadlines on deliverables in the event of a late payment as a result of any work disruption, without incurring any liability.
- Payment shall be made in X currency, or an exchange rate at X date on Oanda.com shall apply.
- The client is responsible for any bank fees incurred by their, or any intermediary bank. In the event of a SWIFT transaction it shall be made with the OUR payment code.
- The jurisdiction in the event of a conflict shall be England and Wales. Neither party shall be bound by arbitration.
- The client and consultant shall both indemnify the other up to the total value of the contract and shall not under any circumstance be liable beyond X GBP.
We also no longer share downloadable links of our deliverables until they are paid up. They get a view/comment only link for reports/data etc.
We’ve found that clients that aren’t willing to accept these terms won’t pay you either way.
We determine the net days on the invoice based on the credit rating of the client. Ironically, the good clients pay within 2-3 days normally, and the difficult ones are very “long tail”. About 1% of contracts tend to fully or partially default on their payments.
We’re in a particularly credit poor industry but our average delay due to late payment is 23 days. Those clients where we stop delivery pay on average 11 days sooner than those contracts where we don’t stop delivery.
This is based on around 2,000 invoices sent over the last 5 years.
It costs something like 80 quid to file for recovery in court and in our experience invoices are immediately paid up when a “Letter before action” is sent.
You burn the relationship, but arguably you probably don’t want it anyway.
In a different domain, this is the painful lesson of almost anyone who tries to help people in a bind -- you can try to help, but yours is unlikely to be the advice that sets them straight, so you shouldn't get too invested with unproven or, especially, proven unreliable actors.
Neatly distilled I believe you are correct
Be pleasantly surprised when a poorly run project is being run by nice, honest people. Prep for the opposite.
Project goes well, he gets paid and they're best buds, and he doesn't even realize he was scammed (by intent). If not, well there's no point suing a failed company.
It is most likely going to not pay anyone so you need to make sure you're paid above and beyond anything else otherwise walk.
These founders hire/fire through hundreds of us, they don't give a shit.
If you say 1 thing they don't like they go to the next.
The weirdest part to me, receive a call and just get up and go? Priorities? Did you write this blog post from the doghouse?
Or... maybe he needs income to exist.
Often paid late, but FIVE times, I never got paid at all, one time it was several thousands over the course of months and I almost pursued it in court, but in the end I took the L.
It's always these incubator types, they're the absolute worst clients. They have the cash in the bank too, they often just forget or feel entitled and don't want to back down.
NEVER work for a YC founder.
It isn't, but you can't get blood from a stone and squeezing costs money.
It sounds like the entity that the contract is with has no real assets and/or is based in a jurisdiction which is hard to enforce judgements in. That's a case where you need to get paid up-front, which is the real lesson in this article.
Some favorites:
- No way they would actually screw me over! We're buds/they got me tiger balm/they paid some/I did them a solid
- Thin veneer of safe fallbacks that doesn't hold up under scrutiny. Legal or other 'repercussions'
- Endless delays and excuses (though it's usually too late by this point)
Also, mandatory: https://creativemornings.com/talks/mike-monteiro--2/1
Choice quote from the linked talk (aptly titled "F*ck you, pay me").
> They were attempting to pull off AR effects on the transparent OLED windows of the bus without accounting for lens distortion, field of view, parallax, occlusion, etc., and were frustrated and mystified when things didn’t appear to line up. They were completely naive to what depth and scale cues are and how to deploy them.
If I don't get paid for one day of work, I will probably get over it in a few hours. If I don't get paid for six months of work, we will have a serious problem. The tighter and more incremental we can make the delivery process, the less likely anyone gets screwed.
If a party is pushing hard for long-term contracts or large up-front sums of payment, I would walk away from that transaction unless there was a literal golden goose sitting in their lap.
HockeyStack, Greptile, Velt all had problems paying me and all required 7 day a week, overnight, etc.
This is unfortunately all too common. It's hard for someone who isn't an expert in the specific field to separate a smooth grifter from a more typical sales pitch
this is only getting worse with ai.
all the artifacts of good work are there but none of the depth.
The people behind this were irresponsible, childish, and exemplars of the Dunning-Kruger effect. They weren’t really hardline crooks. Crooks are probably a lot more organized.
I have gotten myself invested with similar crowds. There’s usually a charismatic spokesperson, leading the chaos.
They likely didn’t plan to rip him off, but paying him wasn’t really something they thought about. Real crooks put lots of planning into taking money.
> Multiple very junior developers were touching (binary, TouchDesigner) code and deploying straight to production via thumb drive, with zero version control. In fact, they didn’t know what version control was.
I suspect many startups fit that description. If they survive, then they usually pull themselves up by the bootstraps, eventually. Many of them collapse, taking everything with them.
When you go out of pocket - you are out of pocket and the risk is all yours. If that one thing was different then all the remaining risk is on the client - they don't want to do version contr - ok cool you still get paid.
Usually when you have to pay in to get paid out (outside of a direct investment scenario) it's a scam. The people who fall for the Nigeria Prince thing are operating the same way.
Early/frequent payment terms are always good to have but you may not always have the leverage for it depending on where you’re at as a contractor.
Takes getting ripped off a times before insisting on better terms I guess. It’s like bombing your first job interview… you can prepare but it just needs to happen.
And yet, somehow, you gave them the most important time you had for their promises.
This wasn't because of the customer or not getting paid. This was the author's choice.
no it isn't. why you did not sue them? success rate of international arbitrage (New York Convention) proces into China is 90% success rate. USA/EU companies who sue Chineses companies in China for breach of contract seem to be winning rates. Enforcement of USA curt orders do not need to go thorugh Chinese courts again, and are enforced by local authorities (local sharks) with success rate of 80% for foreign firms suing chinese firms. fees are also fairly low. case is straightfoward.
if author went and sue, likely he would get his money back.
Because they could just dissolve the entity and get away with it. Did you even read the rest of the article?
A little hyperbolic, but more accurate than not when laypeople think about contracts.
A contract isn’t a magic spell, it is a declaration of shared understanding that can be used for clarity and in legal proceedings.
If you think of a contract as a way to ensure you get what you agreed, yes, it is toilet paper, because a contract doesn’t remove counterparty risk.
Ordinarily, I would sign master agreements and set PO terms up-front. Typically, the better customers would agree to very strict requirements / objectives for a particular time period for a specific price. Any deviations would require negotiation. Hourly is fine too but there must be regular milestone deliveries so that there's demonstrable value for money being conveyed rather than an appearance of a milking-oriented consultant. Expectations must always be managed.
And is who they are relevant to the lesson (stealing time/effort is easy to get away with, you need to protect yourself from that)?
> I’ll happily tell you who they are - get in touch